Sure there's value in this sort of reassignment but what usually happens in that case is: 1) Private equity acquires the assets at bargain basement prices and

Sure there's value in this sort of reassignment but what usually happens in that case is: 1) Private equity acquires the assets at bargain basement prices and proceeds to squeeze out whatever profits they can. One of the most common ways this is done is by laying off staff. 2) A competitor buys them out, leaving less competition. Also followed by a large layoff to reduce redundancies. 3) The business is reorganized to maximize short-term efficiency, regardless of the cost to others - customers, partners and society at large. These aren't bad outcomes per se, but I suspect that those that are reflexively against corporate handouts wouldn't be happy about these either. The general point of an industry bailout is to avoid outcomes like this since in crises, these can add to the pain. The actions taken to ensure your own company is financially solvent are often counterproductive if they are all taken by all parties involved. And various markets involved - whether in terms of labor or capital - are also likely not functioning efficiently enough to absorb the resulting dislocations. And typically bailouts are not great outcomes for the shareholders involved. Bailouts can be great for the management, but only to the extent that it's also great for most employees. As long as the shareholders (and creditors to a lesser extent) take a big cut, there isn't a huge moral hazard either.